| Transactions of the Week |  | |  | | Transaction Description: | | $2,700,000 No Cash Out Retail Refinance George Smith Partners successfully placed the refinance of an under-performing retail center in San Mateo. The 30 year amortized loan is priced at 6.15% fixed for five years before adjusting for the 2nd five-year term. |
Challenge: Unanchored retail is a challenge for most debt providers. The subject property, while providing a 1.30 debt coverage ratio, was 75% leased and occupied at application after two national tenants cancelled their leases. Transactions under 80% occupancy are traditionally qualified as bridge or transitional loan requests. Several leases were above market at the time of funding. |
Solution: GSP identified a local portfolio capital provider who is comfortable financing in-line retail and was willing to look to the in-place tenancy in servicing the debt regardless of the physical occupancy. One of the two vacant spaces was fully furnished as a sandwich shop and required no TIs or fixtures. This space became leased and occupied six days prior to close resulting in an 87% occupied center at funding. A favorable MAI valuation and market rate lease underwriting (below actual collections) added additional cushion to this loan request. | | | Rate: 6.15% Fixed for 5 Years | | Term: 10 Years | | Amort: 30 Years | | LTV: 75% | | DCR: 1.30 | | Recourse | | Lender Fee: 0.5% | | Broker: David Stepanchak | | | |  | | Transaction Description: | | $1,350,000 Cash-Out Beverly Hills Multifamily Refinance. GSP arranged the non-recourse cash-out refinance for an 8-unit Beverly Hills apartment building. The five-year term is fixed at 4.5% and amortizes over 30 years. The Borrower required a non-recourse return of equity at a competitive rate for their asset that had been owned and self-managed since 1996. The additional liquidity is slated for other real estate investment opportunities. GSP was able to negotiate terms with a lender who agreed to maximize proceeds without the typical requirement for a personal repayment guarantee. The result is an aggressively priced and sized five-year fixed rate loan that offered a 20% return of equity to the Borrower. | | | | |  | | | | Short Term Joint Venture & Preferred Equity from $3,000,000 GSP identified an equity provider targeting middle-market transactions and is seeking to advance up to 90% of the equity co-invest on value-add projects. Joint Ventures or Pref Equity can be structured for an experienced, local operating partner. Performing and non-performing discounted note purchases will also be considered. Two to five year hold periods will be underwritten for equity requirements from $3,000,000 to $10,000,000 with as little as a 10% capital contribution from the operator. | | | | Hot Money | National Non-Recourse Bridge Loan Program to 80% LTV from $10,000,000 George Smith Partners is originating bridge acquisitions and refinances to 80% LTV with a national portfolio lender. This capital provider utilizes a "Life Company" process for their non-recourse transactions. Floating rate loan terms range from 3 to 10 years, offering a roll-over into a 30/360 amortization upon stabilization. Class A & B products financed are office, industrial, and retail. Housing requests will also be considered, including student housing and condo reconversions. Financing for broken condos with an accrual debt service structure and 8.5% look-back return to the lender is available. | | | If you have an inquiry regarding George Smith Partners' commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer, at (310) 867-2995 or TAugust@GSPartners.com. | | | Join Us on LinkedIn | | George Smith Partners is now on LinkedIn. Click here to join the George Smith Partners group to get access to current conversations and topics | | | | Pascale's Perspective | Slovakia In or Out? All eyes were on Slovakia and Malta, the two final countries to approve the expanded EFSF (European Financial Stability Fund). The collective worldwide market "hiccupped" Tuesday as Slovakia's parliament voted down the approval as a testament of the "fear factor" and fragility of markets. They failed to approve the measure but indicated they would approve it later this week after a reshuffling of the ruling coalition. The resulting optimism lowered volatility and boosted equity markets. The recent "flight to quality" that brought the 10 year Treasury yield down to 1.76%, is over for now. Today's yield is 2.21%. CMBS/Credit Markets: There is some appetite for risk, but only the "best risk" ie; the premium AAA tranches for CMBS and corporates. The lower tranches (smaller and more risky) are undersold with few buyers. The uneven demand is causing some dysfunction in the credit markets and in CMBS with overall spreads remaining wide. It is all due to the uncertainty as each week brings a new crisis, perceived or actual. ...Stay Tuned... David R. Pacale, Jr. | |
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